US-based automobile distributor HAAH Automotive Holdings has reached out to India’s Mahindra & Mahindra Ltd (M&M) with an offer to invest USD 258 million in the latter’s Korean subsidiary SsangYong Motor Company, according to a report by the news agency Korean Investors.
The report said that Indian automobile manufacturer, which owns 75% stake in SsangYong Motor, is considering the proposal submitted by HAAH last week.
HAAH Automotive has also put forth some conditions while offering to invest in SsangYong including deferral of the cash-strapped Korean carmaker’s debt repayment to its creditors until its recovery, the new agency cited.
M&M declined to comment on the matter.
Earlier in June, Pawan Goenka, managing director at M&M had for the first time said that the company management is open to cede control of its debt-ridden subsidiary to willing investors.
M&M, which had drafted a 3-year recovery plan for SsangYong and had estimated that it would require funding of up to 500 billion KRW or USD 406 million over the next 3 years, later declined to inject any fresh equity citing tough market conditions as a result of the covid-19 pandemic.
The company has been looking out for investors since Jan – Feb for SsangYong in an attempt to arrange required funding for the Korean carmaker. M&M had also approached Korea Development Bank for arranging the funding for its subsidiary.
SsangYong posted a loss of 341.4 billion won ($288 million) in calendar year (CY) 2019 because of sluggish sales and increasing depreciation and operating costs, up from $56 million and $58 million in CY2018 and CY2017, respectively.